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Change in the insurance industry is inevitable. While insurers have enjoyed relative stability to date, the rapid evolution of technology is sure to disrupt. The future will favor insurers who embrace change and lead the way to digital transformation.
For Accenture’s Financial Services Change Survey, 292 insurers responsible for developing their organizations’ change strategy and/or implementing their change programs were interviewed. The following five trends show that the future will favor change leaders, those who have honed their agility and mastered change.
1. A future battleground
While insurers have been somewhat immune to disruption so far, they aren’t complacent. Change is accelerating. Emerging technologies, such as autonomous vehicles and the Internet of Things, combined with low consumer trust and declining penetration rates point to opportunities that nimble new competitors and innovative insurers seek to capitalize on.
In the Change Survey, 80 percent of insurers said they currently invest moderately or significantly in new digital technologies and channels, and 61 percent expect to increase their investment soon. Insurers will need to defend and transform their core business while exploring new growth opportunities to remain competitive on this future battleground.
2. Rapid ROI demanded
The days of multi-year change programs with back-loaded benefits are long gone. Eighty percent of insurers said their shareholders now expect change programs to deliver targeted benefits within 18 months or less. Insurers must balance resources between ‘run the business’ and ‘change the business’. What’s more, change leaders must ensure that ‘change the business’ activities aren’t just enhancing existing business models, but instead creating profitable and sustainable new value streams. To meet these demands, change leaders must be agile, able to balance stability with adaptability, and make effective decisions.
3. Cost and the customer experience
Insurers are taking change increasingly seriously. Fifty-three percent of Change Survey respondents expect to increase investments in all aspects of change over the next 12 months. Reducing costs and improving the customer experience top insurers’ investment priorities, with cost reduction the most likely investment category to increase over the next 12 months.
4. Change leaders emerge
Amidst industry transformation, change leaders are emerging, supported by workforce cultures that embrace innovation and transformation. Change leaders are significantly more likely to report success from their change programs. Their key focus points are having well-defined digital strategies with a clear change vision and committed leadership; they foster cultures that embrace change; and they have more professional and effective change capabilities.
5. The human factor
Change leaders focus on fostering an engaged workforce that has a positive attitude towards change. This is critical, as people can be one of the greatest barriers to change. Ninety-six percent of change leaders are sensitive to employee engagement and performance as an internal driver of change (versus only 69 percent of peers). They also invest more in the workforce and transformation of the workplace, and are growing these investments to improve the employee experience, enhance human-machine collaboration and raise performance.
The majority of insurers recognize their traditional business models are unlikely to endure. They need to develop their ability to change continuously and make explicit choices about their future, form a clear vision of how to develop it, and then execute it boldly and with discipline.